FDZ-Arbeitspapier Nr. 15 - Joachim Merz Lars Osberg Keeping in Touch - A Benefit of Public Holidays Using German Time Use diary Data

 
FDZ-Arbeitspapier
  Nr. 15

         Joachim Merz
         Lars Osberg

          Keeping in Touch -
         A Benefit of Public
         Holidays Using German
        Time Use diary Data

2005
FDZ-Arbeitspapier
  Nr. 15

         Joachim Merz
         Lars Osberg

          Keeping in Touch -
         A Benefit of Public
         Holidays Using German
        Time Use diary Data

2005
Herausgeber: Statistische Ämter des Bundes und der Länder
   Herstellung: Statistisches Bundesamt

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Keeping in Touch -
A Benefit of Public Holidays Using German Time Use Diary Data

Joachim Merz and Lars Osberg1

Abstract

This paper argues that public holidays facilitate the co-ordination of leisure time but do not constrain the
annual amount of leisure. Public holidays therefore have benefits both in the utility of leisure on holidays and
(by enabling people to maintain social contacts more easily) in increasing the utility of leisure on normal
weekdays and weekends. The paper uses the variation (13 to 17) in public holidays across German Länder
and the German Time Use Survey of 2001-02 to show that public holidays have beneficial impacts on social
life on normal weekdays and weekends. Since these benefits are additional to the other benefits of holidays,
it suggests that there is a case to be made for more public holidays.

1 Introduction

How many public holidays should we have?
This paper argues that – within the range of variation now observed in affluent economies – the major social
function of public holidays is to facilitate co-ordination in the timing of leisure. Co-ordination of leisure time
has costs (e.g. in congestion of leisure facilities) and benefits (in making it easier for people to arrange to get
together socially). In this paper, we focus on one aspect of the benefits. We argue that the easier socialization
enabled by public holidays has benefits that extend beyond time use on public holidays to time use on
normal workdays and normal weekends, because “keeping in touch” on holidays helps maintain social

1
  Prof. Dr. Joachim Merz, Department of Economics and Social Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe, FFB), University of Lüneburg,
Campus Scharnhorststr. 1, 21335, 21332 Lüneburg, GERMANY, Tel: 04131/677-2051, Fax: 04131/677-2059,
E-Mail: merz@uni-lueneburg.de, http://ffb.uni-lueneburg.de
Prof. Lars Osberg, Department of Economics, Dalhousie University, Halifax, Nova Scotia, B3H 3J5, CANADA, Tel: (902) 494-6988, Fax: (902) 494-6917, E-Mail:
Lars.Osberg@dal.ca, http://myweb.dal.ca/osberg/

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                 1
contacts and enables easier social matching on normal workdays and weekends. Hence, if public holidays
facilitate social leisure time matching and increase the marginal utility of leisure on normal workdays and
weekends, the increase in the utility value of leisure time on those days should be counted as a benefit. The
focus of this paper is, therefore, on illustrating the size and significance of the role which public holidays play
in time use on “normal” (i.e. non-holiday) weekdays and weekends.
Public holidays ensure that (with the exception of workers in essential public services) individuals all have
leisure time at the same time, but public holidays do not typically force individuals to consume more leisure
in any given year. In, for example, the German data which we use, Bavaria has the most public holidays (17),
while other Länder have from 13 to 16 public holidays (see Appendix A) – but even Bavarian workers still have
348 other days each year in which they could vary their working time to compensate for any unwanted
“excess” leisure on their 17 public holidays. Employers and employees can agree to shorter private vacations,
weekend working or longer hours of work on normal workdays if that is in their mutual interest, or workers can
look for new jobs with different hours, or for second jobs. Both workers and firms have multiple possible
margins of adjustment to enable them to optimize their total annual consumption of leisure time2 - but public
holidays are a unique type of leisure time which is co-ordinated with others.

From this co-ordination perspective, the fact that Bavarians have 17 public holidays, while residents of Berlin,
Bremen, Hamburg and some other Länder have only 13, can be seen as a 30% differential in non-weekend3
co-ordinated leisure time (i.e. public holidays) across German Länder. What implications might this variation
in leisure co-ordination have?

Section 2 of this paper extends the model of social leisure time matching advocated in Osberg (2002) and
Jenkins and Osberg (2004) to recognize the fact that having a social life requires social contacts, which
typically atrophy if people “don’t keep in touch”. It conjectures that in Länder with more public holidays,
greater possibilities for leisure co-ordination will mean that individuals typically have a longer list of social
contacts, and will consequently be able to match more easily with others to consume social leisure on normal
non-holiday workdays, Saturdays and Sundays. Section 3 uses the German Time Use Study 2001/02 to test
these hypotheses – Section 3.1 describes the data, while Section 3.2 presents simple summary statistics and
Section 3.3 uses a regression approach to assess the impacts of greater leisure co-ordination on social time,

2
   The predictability and long standing nature of public holiday entitlements means that workers and firms have had lots of opportunity to adjust at other margins of labour supply.
If, as we argue below, the marginal utility of leisure time increases when the number of public holidays increases, total desired consumption of leisure – and total utility – will rise,
but it still remains true that the number of public holidays is typically not a binding constraint on total annual leisure consumption.
3
 Although religious duty to observe the Sabbath can explain the historic origins of the ‘weekend’, in a secular and multi-cultural society the co-ordination of leisure time is its
primary social function. In the recent literature, Jacobsen and Kooreman (2005) have examined the implications of relaxation of constraints on shopping hours in Holland for
market work, shopping, and “leisure” (the aggregate of all other activities) while Skuterud (2005) has analyzed Sunday shopping regulation in Canada. In general, the more that
weekend days come to resemble weekdays, the greater is the relative importance of public holidays as a leisure time co-ordination device.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                      2
arts and cultural activities and community meetings. The literatures on social capital, health and culture have
separately emphasized the social value of each of these types of time use, and our model of time use is
unambiguous in predicting higher levels of individual utility where individuals can choose from more leisure
time options. Section 4 therefore discusses the public policy implications. Although we recognize that we
have only considered some of the benefits of public holidays, and that a fuller analysis should also consider
the costs of more public holidays and the extent of diminishing returns to the number of public holidays, we
conclude that there is a case to be made for more public holidays.

2 The Utility Value of “Keeping in Touch”

The core hypothesis of this paper, and of Jenkins and Osberg (2005), is that an individual’s time use choices
are typically contingent on the time use choices of others, because the utility derived from leisure time often
benefits from the presence of companionable others. Jenkins and Osberg argued that although the labour
supply literature has often started from the premise that individuals maximize the utility they derive from their
own consumption of market goods and non-work time, time spent in isolation is, for most people, only
pleasurable in small doses. Many of the things that people actually want to do in their non-work time are
more pleasurable if done with others – foreign travel or choral singing are particularly clear examples. Indeed,
many activities (such as playing soccer or bridge) are impossible without others. However, the huge variety of
leisure tastes that people have means that individuals have the problem of locating Suitable Leisure
Companions – ‘somebody to play with’ – and of scheduling simultaneous free time. Consequently, if paid
work absorbs more of other people’s time, each person will find their own leisure time scheduling and
matching problem more difficult to solve (i.e. their leisure hours will be of less utility). As a result, there is an
externality to individual labour supply choices that implies the possibility of multiple, sometimes Pareto-
inferior, labour market equilibria.

Jenkins and Osberg, however, took the number of social contacts of each individual as given. In this paper, we
add to the previous model the realistic assumption that social contacts will depreciate if not used for an
actual match. This endogeneity of social contacts implies that localities where individuals are more easily
able to renew their social contacts will, ceteris paribus, also be localities where the marginal utility of leisure
time (and total utility) is greater.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                         3
A model of the division of time between work time, and solo and social leisure time

Traditional labour supply theory starts, in a one period model, with each individual maximizing a utility
function, as in equation (1):

(1)                      U = u(C, L)

where C represents consumption and L represents non-work time. Jenkins and Osberg (2005) worked with the
more general formulation of a two-person household, using the subscripts m and f to represent the individual
partners. Since one can expand the individual model to a unitary household model by simply adding ‘m’ or ‘f’’
subscripts, nothing is lost by emphasizing the individual’s utility maximization problem.

In this model, the wage rate available in the paid labour market (w) and the total time available for hours of
paid work (H) and non-work time (L) are seen as the fundamental constraints.4

(2)                      H + L =T

(3)                      C ≤ wH.

Suppose now that individuals can spend their non-work time either alone or in social leisure5 and denote the
non-work hours spent alone as A and the non-work time spent in social leisure as S. Suppose further that in
order to enjoy social leisure, each individual must arrange a leisure match with some other individual (or
group of individuals) from among the list of possible contacts that they have at the start of each period. We
assume as well that before arranging their social life, individuals have to commit to a specific duration and
timing of their work hours.6 In this revised model, individuals decide how many hours they want to work, and
must start each period by making a commitment to a specific number of work hours, at specific times. This
decision determines money income, which determines the utility from material consumption. However, at the
start of the period, the utility to be derived from social life is uncertain because the search process for
Suitable Leisure Companions involves uncertainty, since some desired social matches may not be feasible.
Time spent alone, and not working, is the residual after work and social commitments are honoured.

Total utility experienced during the period will be given by(4)7:

(4)                      U = u(C, A, S1, …, Sn,)

4
 Clearly, this formulation assumes that work hours are available without quantity constraint at a constant real wage, without progressive taxation. Non-labour income (from
capital or transfer payments) and any complications of human capital investment through on the job training are ignored.
5
 We shall ignore issues of time spent in household production in order to focus on the leisure time dimension. Alternatively, one can think of household production choices
as being part of H, and the goods produced by household labour as part of C.
6
  To keep things simple, we assume that the process of arranging one’s social life takes no time at all, even if its results are uncertain, ex ante, at the start of each period
(one could call this a ‘speed dialling’ assumption).
7
    To avoid excess notation, we suppress for now the subscript t denoting the time period.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                         4
where A represents non-work time spent alone, and S1, …, Sn represent social leisure when the number of
realized social leisure matches is n.

This revised model is, therefore, a generalization of the traditional model, and nests the traditional model. In
the traditional model, it is only the total amount of non-work time (the sum of social and solo leisure) that
matters: the division of that time between time spent with others and time spent alone is irrelevant.8 A
testable empirical implication of the traditional model is that, in any regression in which time-use explanatory
variables appear, coefficients on social leisure time and solo leisure time variables should be identical.

However, the problem with wanting to have a social life is that one cannot do it unilaterally. Arranging a social
life involves a search process which is constrained by the social contacts available to each person, and by the
availability of other people. We can denote the list of such social contacts at each point in time as kt for each
individual (and this paper will argue that kt depends in part on the number of public holidays in the
jurisdiction of residence of each individual). Each match with a possible Suitable Leisure Companion from a
person’s list of contacts has a given level of utility associated with it but, in order for there to be a match, both
parties must agree on its timing, duration and purpose.9 Social leisure therefore comes in discrete
engagements, and it is not certain – at the point in time when the individual must commit to a given number
and timing of work hours – which social matches will prove feasible.10

The probability that a specific leisure match will be feasible can be denoted by pi, where the subscript i
indexes the identities of possible Suitable Leisure Companions, and the utility associated with that match as
u(Si).11 The expected utility of a specific social leisure match is then given by piu(Si). Individuals will then
maximize their expected utility as in (5):

(5)                        max Ε(U) = u(C) + Σi∈k piu(Si) + uA[T – H – Σi∈k pi(Si)]

where uA is the utility of non-work time spent alone.

Non-work time comes in a variety of forms – paid public holidays (P), paid vacation days (V) and unpaid
leisure time (LU) [e.g. on weekends and evenings]. The total time constraint can be represented by equation 6,
and the non-work time constraint is therefore given by equation 7.

8
  Taken literally, this implies that, with a given amount of consumption goods and work time, a person’s utility level would be unaffected were they to be deprived of social
leisure altogether – as, for example, in solitary confinement.
9
    When utility from a possible contact falls short of the reservation utility of being alone, no match will be sought with those individuals.
10
    One can think of each potential social match as involving some implicit bargaining between the participants as to duration. In this paper we do not need to enquire as to
the solution algorithm. It could be Nash bargaining or determined by some other mechanism, such as social norms of protocol (e.g. the UK convention that the Queen always
is the last to arrive at a social function and the first to leave). All that is needed for this paper is that the duration cannot be unilaterally determined by both parties, which
implies that individuals typically cannot equate exactly the marginal utility of social leisure time and their reservation utility of time. This implies that individuals compare
the average utility per hour of a given social leisure time match with their reservation price of time, which can be thought of as the ‘I would have liked to have left half an
hour ago but, on the whole, I’m glad I attended’ phenomenon.
11
     Without loss of generality one could index potential matches by timing, duration, and purpose, as well as by the identity of the other leisure companions.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                       5
(6)                    T = H + P + V + LU

(7)                    T – H = A + Σi∈k (Si) = A + S = P + V + LU

When firms pay for both time actually worked (H), public holidays (P) and vacations (V ), hourly compensation
for time actually worked (w) has to be distinguished from the nominal hourly wage (wN ), as Equation 8 makes
precise. However, the revised model retains the same financial constraint as in the traditional model – i.e.
that material consumption cannot exceed earned income ( C = wH                                                 – see equation 3). This constraint is
expressed in terms of actual hours worked (H) and labour compensation per hour actually worked (w), since
presumably workers can see through the packaging of their nominal hourly compensation.

(8)                    w = [(H+V+P)* wN] / H

To illustrate how this model compares with the traditional model, consider first how an individual’s labour
supply decision is usually pictured. The traditional model assumes that paid work hours are continuously
available and can be decided with certainty at the start of each period12 and that there are only two possible
uses of total time – which implies that the hours of work decision directly determines hours of leisure time,
whose utility is known with certainty. Both goods consumption and leisure time are assumed to have
diminishing marginal utility, so utility is maximized when the marginal utility of time used for work and for
leisure is equal. One can denote the implied optimal labour supply as H* hours.

In the revised model, the returns to paid work are represented in exactly the same way as in the traditional
model, and as implying the same amount of paid working time (H*). We assume that each period must be
started with a decision about working hours, which determines total hours of non-work time. However, the
revised model assumes that individuals will try to maximize the utility to be derived from any given amount of
non-work time by comparing the utility to be derived from solo and social leisure time. Figure 1 presents a
diagrammatic treatment of the choice process. It represents the marginal utility derived from the allocation of
time for each individual.

12
  For our present purposes, we can assume either a constant money wage per hour with diminishing marginal utility to additions to material consumption, and/or that the
marginal productivity (and wage) of each worker decline with greater working hours.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                6
Figure 1
The Implications of Fewer Current Contacts

                                     MU A

               MU H                                                               MU S

                                                                                             MU S ‘

  u*

         0                      H*          H**                                                       T

                                       A*
                                                          A**

In order for a decision about total work hours (H*) to be optimal, the expected marginal utility of all three uses
of time (work, solo leisure and social leisure) must be equal for each individual. The optimal ex ante division
of time between desired solo and social leisure is pictured in the right hand side of Figure 1. Figure 1
presumes a given set of decisions by other people as to their working hours, which determines the probability
vector pi defining the chances that specific leisure matches will be feasible. At any point in time the available
contacts of an individual kt are determined by his or her past history of social life. Together, the probability
vector pi and the contact list kt determine, for each individual, the marginal utility of social leisure function
MUS. The diminishing marginal utility of solo leisure is represented by the line labelled MUA.

In order to indicate the uncertainty of the search process for Suitable Leisure Companion(s), dashed lines are
used. The marginal utility of social leisure is drawn in discrete steps to represent the idea that because social
leisure time must, by definition, involve an agreement with others about the duration of time to be spent
together, it will typically come in discrete lumps. Clearly there is a hierarchy in the expected utility to be

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                      7
derived from specific possible leisure matches, and the downward slope of the MUS function represents the
idea that potential social matches can be ordered by their expected utility. Matches at the top of the steps of
the MUS function represent social engagements with highest expected utility, whereas social matches on the
bottom steps (where MUS is below u*) correspond to engagements that would be rejected as having less
expected utility than time spent alone. The MUS function is conditional on the labour supply decisions of
others, and on the own labour supply decision made at the start of each period. Utility-maximizing individuals
will want to choose the division of total time which equates (as nearly as possible) the marginal utility from
working, and from social leisure and solo leisure time. Hence, Figure 1 is drawn to illustrate the equilibrium
condition that MUH* = MUA* = MUS*.

All individuals have the problem of arranging a satisfactory social life – a problem which can be summarized
in terms of:

            (1) “who do you know that you could call?” – which we summarize as the contact list kt available at
            any point in time; and

            (2) “what are the chances they would be available and agree to a date?” – which we summarize in the
            probability vector pi defining the chances that specific leisure matches will be feasible.

The probability vector pi depends on the amount of time potentially available when neither party to the
potential match is committed to working. Since the timing and the duration of their mutual engagement
cannot overlap with the working time of either party, pi is clearly negatively associated with both own work
hours (H), and the work hours of Suitable Leisure Companion i that do not overlap with the own work hours
(Hin).13 Together H and Hin characterise the time which is not available for a social match:

(9)                       pi = g(H + Hin)

where g′(H) < 0, and g′(Hin) < 0.

On a public holiday, or on weekends, H = Hin = 0. Social leisure matches are then easier to arrange – and it is
clear that these activities are highly valued by many people. It is observable that despite the predictable
congestion surrounding many public holidays, people do choose to bear greater travel costs in order to spend

13
   Since some people are in ‘on-call’ work situations or have jobs with involuntary overtime or rotating shifts, one should really think of ‘hours available for work’, rather than
‘hours actually worked’ in analysing scheduling issues. Equation (9) writes the probability of a successful leisure match as dependent only on the time available to each
potential pair of leisure companions. This ignores any capital or other inputs required for a specific leisure activity (e.g. squash court availability) and the consequent
possibility of short run congestion effects in leisure industries. If leisure activities require capital inputs and if there were a general decline in working hours, greater
congestion in leisure facilities would be likely to produce both some substitution of activities and capital inflow. Strictly speaking, (6) represents the probability of a specific
(marginal) leisure match. We leave the specification of a full model of the leisure production function, and the supply of leisure facilities, to further work.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                        8
time with friends and relatives. The greater social activity of individuals on public holidays, compared to other
days, is pretty obvious.

However, this paper focuses not on what people do during their public holidays, but on how a greater or
smaller number of public holidays influences what they do on other days – Saturdays, Sundays and “normal”
(i.e. non-holiday) weekdays. For present purposes, we assume that the marginal utility derived from the
consumption enabled by own working hours (MUH) remains unchanged. However, if fewer public holidays
means that the probability of arranging good leisure matches (on workdays and normal Saturdays and
Sundays) falls, then the marginal utility of social leisure time (MUS) will decline, which can be represented in
Figure 1 by the downward shift to the new schedule labelled MUS′.14 Why might this be the case?

This paper argues that social life is typically characterized by feedback. Acquaintanceships typically start with
an introduction by some other acquaintance. The more one goes out, the more people one meets – and the
more invitations to go out one receives. Close friendships develop as the result of repeated contact, which
increases the desire for more contact. In many ways, the social life that individuals have today depends on
the social life that they have had in the past. Although some contacts are made every day by anyone who
participates in society, it takes repeated contact to maintain a relationship. Since other people may move,
change phone numbers or decline an invitation from somebody with whom they have had no contact for a
while, contacts that are not revisited will eventually expire. A parsimonious approach to modelling this
feedback is to suppose that some amount of social contact (θ) is always exogenously available to individuals,
but other social contact is endogenously determined, because after some period of time (D) a social
relationship will expire, if not revisited. If so, one can write the contacts of an individual in any given period
(kt) as a positive function of total social leisure time in the past D periods, as in equation (7).15

(10)                                   kt = θ + f(Σti,t-D (Sit))                           f’ > 0

and because individuals in such localities have fewer contacts (i.e. δ kt / δ (PUBHOL) > 0), they will have a
lower current marginal utility of leisure time. Given the equilibrium condition MUH* = MUA* = MUS*, and the
decline in the marginal utility of social leisure time (MUS′), the model in Figure 1 predicts that the marginal
utility of solo leisure schedule (MUA) shifts to the right, but its shape remains the same (since nothing has

14
     ′   over an initial range.
15
   Alternatively, one could write kt as dependent on the number of successful social matches (nt ) in the last D periods, or one could argue that more time spent together in
the past will imply a greater readiness on the part of others to accept an individual’s social invitations (i.e. δpi /δ(ΣDit (Sit)) > 0 ) or one could argue that individuals get greater
utility from interaction with closer friends (i.e. δu(Si))/δ(ΣDit (Sit)) > 0) – but all these formulations have the same qualitative impact on the expected utility from social leisure
– i.e.
on Σi∈k piu(Si). The verbal interpretation of Equation 10 is that some level of contacts (θ) is always available but people who have spent more time socializing in the past
have a longer list of social contacts, which expire if not used for some time – i.e. only the last D periods produce currently valuable social contacts.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                              9
happened that would affect the pleasures of a marginal hour of solitary leisure). This implies that the
individual’s social leisure time declines from S* to S** and hours of work increase from H* to H**.

This model does not presume that social leisure always generates more utility than solo leisure, just that it
sometimes does. (Since it is easy to observe that people both want some time alone and also voluntarily
choose some social leisure, this hypothesis seems obvious to us.) Given that proposition, the unambiguous
prediction is that an individual’s working time will increase and social leisure time will decrease when social
leisure time becomes harder to arrange because there are fewer common leisure days and some social
contacts therefore atrophy from disuse. Conversely, if social leisure time becomes easier to arrange because
there are more common leisure days, this model predicts a decrease in working time and an increase in social
leisure time – on normal working days, as well as on holidays and weekends.

3 Data and Preliminary Data Analysis

3.1 Data

To test this perspective, we use the German Time Use Study 2001/02 which collected 37700 time use diaries
from 12600 persons in 5400 households. The core tool was a diary kept by all household members - from the
age of ten – in which respondents recorded the course of the day in their own words for three days, i.e. two
weekdays and one Saturday or Sunday. Survey days were randomly selected and the duration of individual
activities was indicated in ten-minute intervals. In addition to what the respondents considered their primary
activity, a secondary activity could be entered and respondents were asked with whom activities were
performed (this had to be marked in preset categories - children under 10 years, spouse/partner, other
household members, other acquainted persons). The location of activities and any mode of travel was
recorded in connection with the primary activity. The population sampled comprises all private households
shown in the micro-census at their place of main residence, i.e. the German speaking foreign population was
included. Total sample size is evenly distributed over 12 months. Activities were described by the
respondents, and coded into preset categories – Appendix C lists the independent variables while Appendix D
lists the coding descriptions of dependent variables used in this study.

Every participating household filled in a household questionnaire, covering household composition, housing
situation and infrastructure of the housing environment, information on time spent providing unpaid help to
members of other households in the last four weeks and other assistance received, etc. All persons keeping a
diary also filled in an additional personal questionnaire, with detailed questions on the situation of individual

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                    10
household members (e.g. educational qualification, conditions of labour force participation, health, personal
ideas regarding time use, etc.). Field work started in April 2001 and was finished in May 2002.

3.2       Preliminary Data Analysis

On average, how much time do people of working age (25 to 54) spend going out for entertainment,
participating in civic, political and religious meetings or in any type of non-work activity that involves persons
beyond their immediate household? Table 1 compares the responses of Germans by Länder type, where 0
denotes Länder with only the minimum 13 national public holidays, while Länder types 1 to 4 refer to the
number of extra public holidays in the Länder in which the respondent lived. It reports the average time spent
in each type of activity separately for “normal” (i.e. non-holiday) weekdays and for Saturdays and Sundays,
because time usage clearly differs so much on weekends and weekdays.

 TABLE 1a
 Time Spent in Social Activity by Länder type
                 Average minutes per day
                 (including zeroes)

                     Länder type
                                                                                 all
 weekdays            0           1           2           3           4           Länder
 entertainment           10.48        9.00       12.91       14.37       11.67     12.00
 meetings                 2.30        2.09        2.36        2.90        2.78      2.48
 social time         110.41      109.94      119.92      117.07      107.44      114.34

                     Länder type
                                                                                 all
 saturdays           0           1           2           3           4           Länder
 entertainment           31.28       42.63    40.15       49.86       35.08        39.54
 meetings                 3.67        4.19        3.14        2.86        7.36      3.99
 social time         214.76      197.49      225.06      214.81      190.84      212.26

                     Länder type
                                                                                 all
 sundays             0           1           2           3           4           Länder
 entertainment        29.03       24.65       36.27       30.30       38.31         32.46
 meetings              6.93        5.49        7.12        6.82       12.53          7.55
 social time         149.59      162.17      171.56      180.40      199.11       171.57
Source: German Time Budget Survey 2001/02, own computation

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                     11
TABLE 1b
Time Spent in Social Activity by Länder type

                    Average minutes per day
                    (without zeroes, positive
                    values only)

                    Länder type
weekdays            0        1              2          3           4           all
                                                                               Länder
entertainment       131,22      161,59      154,02     165,14      147,60       151,36
meetings            102,17       82,39       76,16      90,90       74,86         83,65
social time         131,85      132,97      141,95     137,69      130,32       136,28

                    Länder type
saturdays           0        1              2          3           4           all
                                                                               Länder
entertainment       154,27      212,60      189,55     227,00      195,80       193,02
meetings            122,86       71,65       71,91     107,83       82,42         85,63
social time         248,99      225,51      269,02     244,75      237,53       249,89

                    Länder type
sundays             0        1              2          3           4           all
                                                                               Länder
entertainment       146,26      125,41      164,18     149,07      160,30       152,87
meetings             75,35       76,52       68,62      71,64       72,25         71,81
social time         183,65      198,78      210,16     213,33      223,96       206,31
Source: German Time Budget Survey 2001/02, own computation

In general, the relationship between average time usage and Länder type is not monotonic (with the exception
of social time on Sundays, which increases steadily from an average 150 minutes in the Länder with least
holidays to 199 minutes in the Länder with most holidays). Nevertheless, it is almost always true that the
average time spent in these three different types of social activity is greater in Länder with more public
holidays that in those Länder with the minimum holidays – and the differences can be fairly substantial, in a
proportionate sense. In, for example, Länder with three extra public holidays, on a normal non-holiday
weekday the average 25 to 54 year old spent 37% more time going out for entertainment, 21% more time
going to meetings and 6% more time in all types of non-work activity involving others outside the household.

In the example of time spent on entertainment outside the home on weekdays cited above, the difference
between residents of Länder with three extra holidays and those in Länder with zero extra holidays was 37%
(= (14.37 – 10.48)/10.48 ). Expressed on an “average, minutes per day” basis this was only 3.89 minutes

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                12
daily, but there are roughly 240 normal working days in a year and social engagements normally come in
discrete time commitments. Hence, if entertainment events outside the home are normally about two hours in
length, another way to express the difference between residents of Länder with three extra holidays and those
in Länder with zero extra holidays is to say that it amounts to about 7.5 additional social engagements per
year16. However, how sure can one be that there is a statistically significant difference associated with more
holidays, given all the many other influences that also affect the time usage of individuals?

To assess this, Tables 2 to 4 present multiple regression results. Their format is similar, because each reports
the results of regressing four variables on Länder type and a vector of control variables. In all Tables, the
regression coefficients are rounded to two significant digits and reported in standard type, while the
probability that particular coefficient is statistically different from zero using a simple T test is reported in
smaller, bold face italics. In presenting the average time spent on each activity among all people, Table 1
averaged the time usage of those who participated to some degree in an activity and those who did none of it.
Because it might be argued that the determinants of any participation can be different from the factors
influencing additional time usage, conditional on participation17, sample selection bias is a concern. Tables 2
to 4 therefore report the results both of Ordinary Least Squares estimation and the Heckman correction for
sample selection bias18. As the bottom row in each Table indicates, in almost every case the inverse Mills ratio
is not statistically significant, implying that sample selection bias is not an issue and that it is the OLS
coefficients which are the results of interest.

The model of time use presented in Section 2 argues that the greater availability of social contacts in Länder
with more public holidays will mean that, ceteris paribus, individuals will participate more in social life (i.e.
the net impact of Länder type on time spent in Entertainment, Meetings and Social Time will be positive).
Primary interest therefore centres on the variable “ltype” (Länder type), which is entered as a quadratic in
order that the “ltypesq” (Länder type squared) term can pick up any non-linearities in the relationship
between Länder type and time use. This implies that the net impact of more public holidays must be read as
the joint impact of both linear and quadratic terms.

For example, in Table 2, the marginal impact of going from one to two additional public holidays on
Entertainment time outside the home on normal non-holiday weekdays can be calculated as +1.46 minutes (=
3.56 – 0.71*(22-12)) – or about three additional social engagements per year, on average.

16
     Calculated as (3.89*240)/120 = 7.78, but rounding down to avoid false precision.
17
  In the labour supply literature, the analogous decision to participate in the labour force has been called the “extensive margin” while the hours of work decision of
workers has been called the “intensive margin”.
18
     The probit model from which the inverse Mills ratio is derived is not reported here for space reasons, but is available on request from the authors.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                                13
The marginal impact on Social Time on normal non-holiday weekdays would be + 2.84 minutes per day ( =
8.96 – 2.04(4-1), which implies about 5.5 additional social engagements per year). Although in both cases
the linear and quadratic relationships are both statistically significant at normal (5%) levels, the estimated
quantitative importance is small in absolute amount (as one might have expected, since the issue is leisure
time usage on a normal workday, when little non-work time is available). Looking to Table 4, which examines
time use on Sundays, the comparable calculation of the marginal impact of additional public holidays on
Entertainment time outside the home would be nil, since neither term is statistically significant. However, the
marginal impact of an additional public holiday on Social Time on normal Sundays is significantly estimated
at + 18.37 minutes, since the statistical insignificance of the quadratic term indicates there is no evidence for
diminishing returns to additional extra public holidays.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                    14
Table 2
                                Time Use on Non-Holiday Weekdays - Germany 2001-02
                           Entertainment                             Meetings                             Social Time
                         OLS          HECK                    OLS                 HECK            OLS                   HECK
age                      0.11             -4.16               0.14                6.93           1.25                   0.87
                                0.89             0.67                0.64                 0.44            0.52                  0.69
age2                    -0.00             0.05               -0.00                -0.08          -0.02                  -0.02
                                0.75             0.70                0.75                 0.41            0.32                  0.58
woman                   -5.57            -46.47              -0.73                -9.98          -14.39             -25.10
                                0.00             0.16                0.11                 0.48            0.00                  0.01
intermediate             0.33             10.86              -0.01                -3.40          -2.85                  -3.65
                                0.80             0.33                0.99                 0.72            0.36                  0.29
supper                  -0.43            -13.84               0.51                -6.08          0.71                   -5.40
                                0.77             0.27                0.36                 0.59            0.84                  0.17
university               2.25             12.30              -0.39                -0.06          -6.00                  -7.16
                                0.20             0.38                0.55                 1.00            0.15                  0.12
health                  -2.99            -31.74              -0.34                -4.27          -10.36             -10.03
                                0.00             0.20                0.24                 0.45            0.00                  0.01
freelancer               5.23             54.81              -0.80               69.11           32.88                  30.63
                                0.16             0.07                0.57                 0.08            0.00                  0.00
entrepre                 0.57             59.28               0.20               49.48           29.28                  26.18
                                0.87             0.09                0.88                 0.12            0.00                  0.01
employee                -1.39             28.33              -0.14               27.79           25.06                  14.24
                                0.53             0.17                0.87                 0.16            0.00                  0.02
Core/frag               -2.37            -20.54              -0.17                7.43           -7.79                  -7.25
                                0.14             0.20                0.78                 0.65            0.05                  0.09
Nocor/nofrag            -3.92            -42.19              -0.15                6.98           -27.04             -29.63
                             0.20                0.19                0.90                 0.80            0.00                  0.00
Nocor/frag              -7.56            -63.01               2.26                8.01           -10.81             -11.82
                             0.06                0.29                0.14                 0.78            0.26                  0.27
cohabits                -0.16             2.69                0.58                -2.03          -6.32                  -5.15
                             0.74                0.50                0.00                 0.54            0.00                  0.00
youngkid                -5.57            -23.51              -1.71                -4.07          -6.99              -11.57
                             0.00                0.08                0.00                 0.75            0.06                  0.01
                -
Eqincome (10            1.17              0.00               -0.20                -0.00          0.01                   0.01
3
 )
                                0.00             0.83                0.17                 0.95            0.00                  0.00
temper                   0.34             4.19                0.01                0.01           0.09                   0.39
                                0.00             0.11                0.75                 0.99            0.62                  0.10
sunhours                -0.87             -7.65              -0.03                -0.98          -2.18                  -1.67
                                0.00             0.19                0.81                 0.68            0.00                  0.18
rainfall                 0.11             1.11                0.23                3.46           0.01                   0.08
                                0.41             0.42                0.00                 0.04            0.98                  0.84
workday                 -0.03             -0.33              -0.00                -0.11          -0.18                  -0.18
                                0.00             0.13                0.00                 0.25            0.00                  0.00

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                             15
Table 2
                                 Time Use on Non-Holiday Weekdays - Germany 2001-02
                           Entertainment                             Meetings                                  Social Time
                         OLS          HECK                    OLS                  HECK               OLS                    HECK

ltype                      3.56              38.57              -0.81                 -16.65           12.97                  8.96
                                   0.01            0.06                   0.10                 0.11             0.00                  0.25
ltypesq                    -0.71             -7.09              0.31                  4.18             -2.85                 -2.04
                                   0.03            0.09                   0.01                 0.24             0.00                  0.27
_cons                      27.07            -102.02             0.50               -127.54             171.69                223.66
                                   0.10            0.71                   0.94                 0.77             0.00                  0.00
Mills lambda                                   230.27                                     49.34                                  -59.65
                                                   0.28                                        0.69                                   0.69
n                               9757             751                 9757                   308                9757                  8122
n censored                                     10546                                      11060                                      1874
adj. R (%)
        2

                                   2,6                                 0,96                                    7,58
Wald Chi p-value
            2

                                                283,4                             103,6 0,000                          691,11 0,000
                                                0,000
Note: In Tables 2 to 5, P>|t| reported in boldface italics

                                                               Table 3
                                          Time Use on Saturdays - Germany 2001- 02
                                Entertainment                              Meetings                            Social Time
                          OLS               HECK                    OLS                HECK            OLS                HECK
age                      -8.65               -22.71               0.14                 -8.29          -7.96              -8.83
                                 0.00                 0.14                 0.86               0.70           0.17                    0.17
age2                     0.10                 0.26                -0.00                0.09           0.08               0.10
                                 0.00                 0.15                 0.96               0.74           0.26                    0.19
woman                    -2.29                1.15                -0.96               -45.88          -8.60             -19.63
                                 0.54                 0.94                 0.41               0.09           0.29                    0.08
intermediate             0.27                 6.42                -0.13                0.83           -8.01              -2.67
                                 0.95                 0.65                 0.92               0.97           0.40                    0.80
supper                   1.12                 -7.67               4.03                 5.01           -0.59              3.22
                                 0.82                 0.62                 0.01               0.86           0.96                    0.79
university               2.67                 -2.63               -3.13               -17.68          -22.27            -28.99
                                 0.65                 0.88                 0.09               0.59           0.08                    0.03
health                   -2.18                -8.20               -0.72               -14.38          -14.82            -11.12
                                 0.39                 0.44                 0.37               0.44           0.01                    0.22
freelancer               -8.48                95.99               -5.11                               -40.82            -37.49
                                 0.58                 0.11                 0.29               0.00           0.23                    0.34
entrepre                -15.06                -5.52               -1.42               -70.11          12.71              14.50
                                 0.28                 0.93                 0.75               0.47           0.67                    0.67
employee                 -8.92                21.54               -1.16               -49.08          2.97              -11.53
                                 0.32                 0.55                 0.68               0.43           0.88                    0.59
Core/frag                -8.29               -71.09               0.07                -45.87          -18.14            -16.01
                                 0.46                 0.08                 0.98               0.61           0.45                    0.55
Nocor/nofrag             2.27                -15.75               7.94                38.87           -23.03            -22.90
                                 0.85                 0.71                 0.04               0.55           0.39                    0.42
Nocor/frag              -22.32               -138.10              -2.02                               -45.14            -65.98
                                 0.21                 0.27                 0.72               0.00           0.25                    0.11
cohabits                 1.10                 -2.01               1.48                13.25           -8.12              -7.34
                                 0.48                 0.66                 0.00               0.09           0.02                    0.05
youngkid                -17.70               -17.34               -1.00                1.41           -16.29            -16.64
                                 0.00                 0.34                 0.55               0.97           0.16                    0.18

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                   16
Table 3
                                        Time Use on Saturdays - Germany 2001- 02
                                Entertainment                             Meetings                            Social Time
                          OLS               HECK                   OLS                HECK           OLS                 HECK

eqincome                 0,00
                         0.00                -0.00                -0.00               0.00           0.01               0.00
                                 0.95                0.64                 0.63               0.68           0.01                 0.21
temper                   1.38                 5.27                0.16                1.07           2.25               1.97
                                 0.00                0.06                 0.04               0.65           0.00                 0.02

sunhours                 -1.99               -8.48                0.55                7.25           0.51               1.33
                                 0.03                0.09                 0.06               0.28           0.80                 0.57
rainfall                 0.15                 1.54                -0.12               2.48           3.48               3.21
                                 0.77                0.45                 0.46               0.60           0.00                 0.01
workday                  -0.01               -0.13                -0.00               0.22          -0.15              -0.14
                                 0.79                0.24                 0.57               0.21           0.00                 0.04
ltype                    6.29                29.27                -2.88              -33.02         19.56              27.40
                                 0.15                0.13                 0.04               0.37           0.04                 0.01
ltypesq                  -1.50               -5.86                0.97                1.90          -5.67              -7.08
                                 0.17                0.23                 0.00               0.87           0.02                 0.01
_cons                   225.75              372.10                -6.17              743.80         402.73            459.71
                                 0.00                0.06                 0.72               0.32           0.00                 0.00
mills
lambda                                           190.93                               -199.01                               -72.61
                                 0.00                0.16                 0.00               0.30           0.00                 0.65
n                        2575                       492                  2575             104          2575                     2102
n censored                                         2421                                  2861                                    508
adj. R2 (%)               2,5                                            0,84                               4,3
Wald Chi2 p-                              99,01 0,000                             39,5 0,000                         120,8 0,000
value

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                              17
Table 4
                                         Time Use on Sundays - Germany 2001-02
                             Entertainment                               Meetings                          Social Time
                          OLS           HECK                      OLS                HECK            OLS                 HECK
age                      -2.97              -3.85               -0.31               -12.09          -17.71           -45.76
                                0.24                0.61                 0.69                0.13            0.00               0.66
age2                     0.03               0.03                 0.01                0.13           0.21                 0.54
                                0.29                0.73                 0.51                0.12            0.00               0.67
woman                    -7.70              -9.88                0.26                -9.67          1.36             33.88
                                0.02                0.45                 0.81                0.12            0.84               0.81
intermediate             2.88               18.64                -3.08               1.51           -4.88            -2.93
                                0.47                0.10                 0.02                0.79            0.54               0.93
supper                   5.95               14.58                -0.33               -1.42          17.32            12.82
                                0.19                0.25                 0.82                0.83            0.06               0.75
university               -4.27             -17.53               -1.32                1.46           -28.85           -24.35
                                0.43                0.23                 0.44                0.86            0.01               0.61
health                   -8.18             -18.67                0.24                3.36           -13.42           -40.34
                                0.00                0.06                 0.75                0.42            0.00               0.69
freelancer               9.49               7.28                 5.58                93.19          20.45            -0.10
                                0.54                0.85                 0.25                0.00            0.51               1.00
entrepre                 -5.87             -18.02                -2.38               46.92          1.92             22.46
                                0.65                0.65                 0.56                0.09            0.94               0.85
employee                 9.97               31.07                3.82                75.80          16.38                2.68
                                0.32                0.26                 0.23                0.00            0.41               0.98
Core/frag                -0.16              -8.98               -4.40               -90.49          -15.50               0.82
                                0.99                0.81                 0.25                0.00            0.53               0.99
Nocor/nofrag             7.24               13.05                -2.97              -77.28          -2.87            -0.30
                                0.55                0.71                 0.44                0.00            0.91               1.00
Nocor/frag               -3.40              20.54               10.19                -9.38          40.23            26.86
                                0.82                0.67                 0.03                0.65            0.17               0.83

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                             18
Table 4
                                         Time Use on Sundays - Germany 2001-02
                             Entertainment                               Meetings                           Social Time
                          OLS           HECK                      OLS                HECK            OLS                  HECK

cohabits                 0.88               7.24                 2.19                2.25           -2.18                 0.38
                                0.56                0.07                 0.00                0.26            0.47                0.98
youngkid                 -3.34             -26.98                -3.06              -12.47          -10.14             -23.40
                                0.48                0.03                 0.04                0.10            0.28                0.57
eqincome                 -0.00              -0.00                -0.00               -0.00           0.00                 0.01
                                0.50                0.79                 0.00                0.11            0.21                0.63
temper                   1.07               2.96                 -0.06               -0.17           0.79                 2.31
                                0.00                0.03                 0.41                0.69            0.08                0.64
sunhours                 -3.28              -6.72                -0.02               0.06           -1.32              -5.35
                                0.00                0.04                 0.95                0.97            0.44                0.75
rainfall                 -0.63              -2.45                -0.08               -0.40          -0.18                 1.38
                                0.25                0.17                 0.66                0.74            0.87                0.87
workday                  -0.06              -0.22                -0.01               -0.19          -0.17              -0.21
                                0.01                0.01                 0.03                0.03            0.00                0.34
ltype                    4.19               6.96                 -2.34               6.54           18.37              35.56
                                0.29                0.58                 0.06                0.62            0.02                0.63
ltypesq                  -0.97              -2.76                0.99                -3.43          -1.04              -0.37
                                0.33                0.36                 0.00                0.52            0.61                0.97
_cons                   126.35             173.80               10.23               460.54          532.98            848.67
                                0.01                0.25                 0.52                0.19            0.00                0.48
mills
lambda                                      84.81                                   -59.79                            837.43
                                0.00                0.30                 0.00                0.54            0.00                0.77
n                        2409               524                  2409                266            2409               1990
n censored                                  2235                                     2519                              479
adj. R2 (%)               2,6                                     2,8                                3,3
Wald Chi2 p-                           20,76 0,000                              80,39 0,000                         24,02 0,8437
value

In assessing whether the number of public holidays plays a role influencing individuals’ time use on other
days, it is important to control for potentially confounding variables – such as age, gender and education –
which might plausibly influence time use. Tables 2 to 4 indicate that their impact is not strong or consistent
(e.g. age has no statistically significant impact on Entertainment, Meetings or Social Time on weekdays and is
only correlated with Entertainment time on Saturdays and Social Time on Sundays, and education is generally
statistically insignificant.) On the other hand, health status clearly matters. Bad Health (as subjectively
evaluated) makes it more difficult for individuals to engage in social activities – the consistently negative and
significant impact indicated in Tables 2 to 4 is plausible.

As well, it is conceivable that differences between individuals in their social time are really driven by aspects
of their work life. Although entrepreneurs or free lancers may have more flexibility in their working time, they

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                              19
may also face more demands on their time outside normal working hours, implying that scheduling a social
life may be harder for them. In general, workers who put in more time on the job clearly have less time
available to allocate to all non-work purposes, and workers whose jobs are scheduled outside the normal
working day (7AM to 5PM weekdays) or whose working hours are fragmented in their timing can be expected
to find it harder to arrange Social Time, to attend meetings or to go out with friends19. In this paper, we control
for the impact of all these variables. Relative to workers who have a standard, non-fragmented workday,
social time on normal weekdays is 7.79 minutes less for workers with fragmented but core working time and
27.04 minutes less for non-core continuous workers. For meetings and entertainment, however, these
variables are statistically insignificant – and if expressed in terms of social engagements per year, the
differences are non-trivial in magnitude.

Income differences20 are associated with statistically significant, but fairly modest, differences in total social
time on weekdays - particularly with regard to time spent with others from outside the household in
entertainment. The coefficient on “eqiincome” reported in column 1 of Table 2 corresponds to (very roughly)
2.5 additional social engagements per year for somebody making an additional 12,000 Euro per year,21 .
There is, a clear impact of the presence of young children in the household – as any parent could predict, they
reduce time spent on other social interaction. The number of co-residents in the household also offers an easy
alternative to going out of the household for social time on Saturdays and weekdays, and is statistically
significant. Finally, to control for the impact on time use which weather conditions can have, we match the
location of the interview to meteorological data (at the regional level). Our control for rainfall is usually
insignificant, but the temperature and sun light hours are often statistically significant.

In summary, more public holidays are significantly and positively associated with more leisure time spent
with others for entertainment and meetings - and with more enhanced total social time. Other statistically
significant socio-economic control variables include the individual’s health situation, occupation (particularly
self-employed status), the fragmentation of a work day, number of cohabitants and household equivalent
income .

Tables 2 to 4 are based on the coding of self-reported time use diaries on three specific days, in which
activities were reported at ten minute intervals. This time diary methodology, because it forces individuals to
walk through the sequence of events in a given day, has significant advantages in ensuring the completeness

19
   See Merz and Burgert 2004 for analysis of fragmented working hour arrangements in Germany and Merz, Böhm and Burgert 2005 for the impact of working hour
arrangements on income and its distribution.
20
     In this paper, we use equivalent individual income, defined as total household net income divided by the square root of household size.
21
  If an additional 1000 Euros of monthly income on average means an additional 1.17 minutes of entertainment on each of 240 working days per year, and each
engagement lasts two hours.

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                    20
and consistency of responses. The disadvantage is a high cost of administration, which mandates relatively
few days observed per respondent and the possibility that a survey will miss low frequency events. The
German Time Use study therefore also asked a series of summary questions on time use “in a typical week”.

                              Table 5
        Time use during a “normal workweek” and for active
                 personal help – Germany 2001-02
                        workweek          active personal help
age                        113.64                        -16.78
                                       0.00                          0.04
age2                        -1.43                         0.26
                                       0.00                           0.01
woman                      -918.96                       95.18
                                       0.00                           0.00
intermed                    56.79                        -11.73
                                       0.00                           0.38
supper                      -3.05                        -14.69
                                       0.89                           0.34
universi                   192.42                        -57.35
                                       0.00                           0.00
health                     -110.33                       48.65
                                       0.00                           0.00
freelanc                   279.96                        93.25
                                       0.00                           0.02
entrepre                   798.65                        61.06
                                       0.00                           0.10
employee                   102.94                        48.45
                                       0.00                           0.04
core/frag                   49.82                        23.74
                                       0.07                           0.23
nocro/nofrag               -125.40                       -37.14
                                       0.01                           0.26
nocor/frag                  38.22                        79.00
                                       0.53                           0.07
cohabits                   -65.92                        -51.19
                                       0.00                           0.00
youngkid                   -75.10                        41.85
                                       0.00                           0.01
eqincome                     0.16                         -0.02
                                       0.00                           0.00
temper                      -0.80                         3.04
                                       0.46                           0.00
sunhours                   -12.49                         -9.45
                                       0.00                           0.00
rainfall                    -1.09                         1.18
                                       0.60                           0.43
workday                      1.41                         -0.18
                                       0.00                           0.00
ltype                       64.73                        41.28
                                       0.00                           0.00
ltypesq                    -17.52                         -8.56
                                       0.00                           0.01
_cons                      -287.65                       600.12
                                       0.22                           0.00
* active personal help given per week to other households (in minutes,
  for childcare, care, household work, do it yourself).

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15              21
Table 5 reports the results of two Ordinary Least Squares regressions – one in which the “normal work week”
is regressed on Länder type and control variables and the other in which the dependent is the active personal
help given per week to other households (in minutes, for childcare, care, household work, do it yourself). Our
model is clear in suggesting that if individuals have more social contacts, and hence their non-work time has
greater marginal utility, their desired work week will be less. Over most of the range of additional public
holidays in Germany, that is the case – the coefficients in column 1 of Table 5 imply that moving from 2 to 3
additional holidays is associated with a decline of 23 minutes in the normal work week, and moving from 3 to
4 additional holidays per year is associated with a decline of 58 minutes.22

Although the model of Section 2 considers the demand for leisure (social and solo), and does not directly
discuss the “Social Capital” which repeated social interaction produces, it is plausible that in localities with
stronger social ties, individuals will spend more of their time helping other households (in childcare, care,
household work, home repairs, etc.). The evidence from Table 5 is however mixed, since the quadratic
specification and the OLS coefficients estimated imply a maximum, across länder type, at 2.41 additional
public holidays.

4 Public Policy Implications

Many labour market outcomes (e.g. the unemployment rate) are influenced in complex and interdependent
ways by a variety of socio-economic trends and policy variables. By contrast, the number of public holidays
per year is a fairly direct issue – and one which is clearly amenable to legislative decision. Around the world,
different legislatures have made somewhat different decisions – Appendix B presents a summary table of the
number of national public holidays in the European Union and other countries. Within the majority of
countries, the number of public holidays also varies at the sub-national level, and most countries have
something in the range of 10 to 15 public holidays each year. The fact that Germany is at the higher end of
this range is useful for the analysis of possible public policy change, since German data may indicate what
countries with fewer holidays (e.g. Canada or the USA) might expect, were they to increase the number of their
public holidays.

However, the variation in public holidays across countries also suggests the question: what is the optimal
number of public holidays?

22
     [ -22.87 = 64.73 –17.52* (9-4)] ; [-57.91 = 64.73-17.52*(16-9)]

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                   22
This paper has constructed a model of social time use which predicts an increase in utility for those whose
social life is easier to arrange because they live in a locality with a greater number of public holidays. It has
also estimated the impact on time use patterns of more public holidays across German Lander and it has
emphasized the increase in the marginal utility of leisure on normal workdays and weekends associated with
more holidays. In doing so, this paper seeks to draw attention to a previously unrecognized benefit – but one
should also not lose sight of the historic reasons for, and benefits of, public holidays.

The public holidays that now exist in different countries have a wide range of specific historic origins, but if
there is a general explanation, it would be the common enjoyment of festivals. Historically, festivals and
holidays have combined time away from work with unifying social rituals – ceremonies, parades and family
gatherings that bring people together in an event with common symbolic meaning. Enjoying oneself in this
way adds to the utility of participants23 on the day which implies that for many people the utility of the leisure
consumed on holidays includes some additional direct utility value to the common enjoyment of that time, as
well as building social cohesion and social capital. The benefits of greater social capital and social cohesion
in outcomes such as faster economic growth, better health and lower social costs have been emphasized in a
growing literature – see, for example, Putnam (2000); Knack & Keefer (1997); or Osberg (2004).

Clearly, however, several caveats are in order.

A marginal net benefit of increasing the number of holidays over the range from 13 to 17 days cannot be
extrapolated indefinitely. At some point (unobserved in current cross-sectional data, but presumably
considerably less than 365 days) an increase in the number of public holidays will overwhelm the ability of
individuals to adjust their hours of work on other margins and will become a binding constraint on aggregate
leisure consumption for a significant number of people, and not just a co-ordination device for leisure time.
“Out of sample prediction” is, in general, something to be approached cautiously. This paper is concerned
with the impacts of additional public holidays, over the 13 to 17 day range and does not make a general
statement about the impacts of additional public holidays at any level of holidays.

When firms pay both for hours actually worked and for public holidays and vacations, the wage per hour
actually worked includes, as a form of “fringe benefit” the worker’s entitlement to paid holidays and
vacations24. If workers can see through the packaging of their total hourly compensation into [wages +
fringes], it is reasonable to think that firms can too. A legislated public holiday may change the proportions,

23
   If, for example, public holidays are often celebrated with parades, but people have the option of not attending, a revealed preference approach would argue that the
opportunity for common celebration must increase the utility of parade participants and parade watchers, while non-attendees enjoy, at minimum, more easily co-ordinated
leisure time.
24
     As equation 9 discussed, in any given period of time, such as a year, w = [(H+V+P)* wN] / H

Statistische Ämter des Bundes und der Länder, Forschungsdatenzentren, Arbeitspapier Nr. 15                                                                           23
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